The president of the 5,000-member Washington Teachers' Union has resigned after financial irregularities in the union's records were discovered by its parent body, the American Federation of Teachers, and referred to the U.S. attorney for investigation, an AFT official said yesterday.

Barbara Bullock complied with a demand from the union's executive board that she step aside as president, the AFT official said. He said two other union officials also were asked last week to resign: treasurer James O. Baxter and Gwendolyn Hemphill, Bullock's special assistant.

Hemphill was the co-chairman of D.C. Mayor Anthony A. Williams's reelection campaign until she left that post a week and a half ago, citing personal reasons.

Edward J. McElroy, secretary-treasurer of the AFT, said the irregularities were discovered after a union member complained about dues overcharges, and independent auditors were brought in to inspect the union's financial records. The investigation revealed that other members also were overcharged and that "a number of checks and credit card expenditures" did not have a proper explanation, he said.

McElroy refused to say how much money was involved, but another source with knowledge of the case said it could amount to "many tens of thousands of dollars and perhaps hundreds of thousands."

Channing Phillips, spokesman for the U.S. attorney's office in the District, confirmed that the case had recently been referred there but declined to provide further details.

Bullock, who had been president of the union for nearly a decade, confirmed yesterday that she had resigned but declined to elaborate. "I'm not at liberty to say [any more] now," she said. "I would have to talk to my attorney before I say any more."

Baxter did not return phone calls, and Hemphill refused to comment when reached, saying, "Ask the people in charge."

Esther S. Hankerson, who was the union's general vice president and had not been involved in financial matters, has become interim president, a promotion called for under the union's bylaws. Hankerson did not return phone calls.

According to McElroy, the Washington union member who alerted the AFT to the financial problems called to say that there had been an overcharge of union dues in a monthly payroll deduction. One source said the deduction, which was supposed to be about $16, was instead about $160.

When union officials were unable to resolve the issue themselves, the AFT sent in an accountant, McElroy said. The questionable expenditures were discovered during that preliminary investigation, he said.

As a result, the AFT contacted the executive board of the union and Hankerson. They hired an outside attorney and an auditing firm to further investigate the irregularities, he said. Information discovered during that probe led the AFT and the board to turn over the evidence to the U.S. attorney's office, he said.

"Then the president, the treasurer and the assistant to the president were asked to step aside from their positions," McElroy said. Only Bullock had done so in writing as of yesterday, he said.

Union members who paid too much in dues will be reimbursed, McElroy added.

On May 20, the union voted to endorse Williams for reelection. As co-chairman of his campaign, Hemphill was subpoenaed to testify before the D.C. Board of Elections and Ethics when Williams's election petitions were found to have so many fraudulent names that his name was not permitted on the Democratic primary ballot.

Williams said yesterday that he was unaware of any problems at the teachers union when Hemphill recently left his campaign.

"I stick by my friends," Williams said of Hemphill. "She's worked very, very hard for me."

The news of Bullock's resignation surprised many people in D.C. education circles.

"I haven't heard anything about it, and I don't know how to react to it," said Linda Moody, president of the D.C. Congress of Parent-Teacher Associations. Moody said that Bullock had been cooperative with her organization, which was working closely to support teachers. "We had some of the same goals and interests," she said.

Bullock became president of the union after the AFT declared invalid the 1993 reelection of then-president Jimmie C. Jackson, saying that "many irregularities" in the voting procedures had been found in Jackson's 124-vote margin of victory over Bullock. She won the new election and has been a visible presence in the District's education world ever since.

One of her central themes was trying to make the salaries of D.C. public teachers more competitive with those of teachers in area suburbs. She helped lead negotiations with city officials that concluded early this year in a new teachers contract that calls for pay increases totaling 19 percent over three years.

Barbara Bullock with schools chief Paul L. Vance, left, and Frank Bolden of the Principals Union. She accepted the union board's demand that she quit.